Illinois – December 10, 2009

Contents

What We Did

We conducted work on four specific programs funded under the Recovery Act—Highway Infrastructure Investment, Transit Capital Assistance, Fixed Guideway Infrastructure Investment, and the Public Housing Capital Fund. For descriptions and requirements of the programs we included in our review, see appendix XVIII of GAO-10-232SP. We selected the four programs primarily to follow up on issues we reported on in previous bimonthly reviews. Our work focused on the status of the programs’ funding, how funds are being used, and other issues that were specific to each program. As part of our review, we visited agencies in Arlington Heights, Chicago, Springfield, and Ottawa.

To gain an understanding of the state’s experience in meeting the Recovery Act reporting requirements, we held discussions with the Office of the Governor. Although Illinois is a decentralized reporting state—meaning each prime recipient of Recovery Act funds is required to report quarterly to federalreporting.gov on a number of measures, including the use of funds and estimates of the number of jobs created and retained—the state plays a role in reviewing the data state agencies plan to report to federalreporting.gov. The first quarterly reports were due in October 2009.

Finally, our work in Illinois included monitoring the state’s fiscal situation and visiting three cities—Chicago, Joliet, and Springfield—to determine the amount of Recovery Act funds each received and learn how those funds were spent. We selected Chicago because it is the largest city in Illinois; Joliet because it had an unemployment rate above the state average; and Springfield because it had an unemployment rate below the state average.

What We Found

Highway Infrastructure Investment Funds

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $935.6 million in Recovery Act funds to Illinois. As of October 31, 2009, the federal government had obligated $772.2 million to Illinois and $313 million had been reimbursed by the federal government. Because the Illinois Department of Transportation (DOT) was able to award contracts for less than the estimated cost of some projects, FHWA has deobligated $105.5 million and Illinois DOT has requested that these funds be obligated toward other highway projects. The state also revised both its definition of economically distressed areas and its maintenance-of-effort calculation based on new federal guidance.

The Federal Transit Administration apportioned $375.5 million in Transit Capital Assistance and $95.5 million in Fixed Guideway Infrastructure Investment funds to Illinois and urbanized areas within the state for transit projects. Transit agencies under northeastern Illinois’s Regional Transportation Authority were allocated $414.2 million for transit projects, including $318.7 million from the Transit Capital Assistance program and $95.5 million from the Fixed Guideway Infrastructure Investment program. As of October 1, 2009, the three transit agencies that make up the Regional Transportation Authority had initiated most of the transit projects they planned to fund with Recovery Act dollars.

Public Housing Capital Fund

Illinois has 99 public housing agencies that have received Recovery Act formula grants. In total, these public housing agencies have received $221.5 million in Public Housing Capital Fund formula grants. As of November 14, 2009, 89 of these public housing agencies have obligated $41.8 million and 76 have drawn down $16.4 million. In addition to the Capital Fund formula grants, HUD awarded 32 competitive grants to housing agencies in Illinois. Both the Chicago Housing Authority and the Housing Authority for LaSalle County—the two housing agencies we visited for this and previous reports—continued to make progress on Recovery Act projects.

Recipient Reporting

The Illinois Office of the Governor requires state agencies to submit employment and other data to the Illinois Federal Reporting Test site for review and verification before they submit their data to federalreporting.gov in order to help ensure that information reported were correct. Most of the errors the state identified during its review of agencies’ data were relatively minor.

Illinois’s Fiscal Condition

Recovery Act funds continued to assist the state primarily in funding its education, infrastructure, and Medicaid programs and will allow the state to provide an additional $2.4 billion in assistance this fiscal year. The state plans to reduce spending and will seek new revenue sources in anticipation of an end to Recovery Act assistance after fiscal year 2010.

Cities’ Use of Recovery Act Funds

Chicago, Joliet, and Springfield have all received Recovery Act grants directly from multiple federal agencies. Chicago received a total of $1 billion, Joliet received a total of $3.8 million, and Springfield received a total of $5.3 million. The cities generally used the Recovery Act grants to create or expand a variety of programs and services that would otherwise have remained unfunded, such as energy efficiency upgrades.